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City property values fall on average
Average drop is 4.188 percent
Tuesday, January 15, 2013
By PAUL COLLINS - Bulletin Staff Writer
Taxable properties in the city decreased in value by an average of 4.188 percent overall as a result of the recent reassessment, according to Martinsville Commissioner of Revenue Ruth Easley.
There are four categories of taxable properties: residential, which decreased in value an average of 0.94 percent; multifamily, which decreased an average of 0.82 percent; commercial, which decreased an average of 10.34 percent; and industrial, which decreased an average of 3.45 percent, Easley said.
All of those figures are averages, and individual property values may vary from those averages, she stressed.
The commercial property category had the largest average percentage decline in value. Easley said “a couple of unique properties,” which she declined to identify, had large reductions in value, skewing the average.
One of those properties declined in value because “when there are high vacancy rates and income-producing property is not producing income,” the value drops, she said.
A second commercial property declined in value “because we had more accurate data to work with, based on regional surveys of similar properties,” she said.
Easley said, “When doing assessments of residential properties, we rely on sales data,” which she described as “all over the place.” Some sales brought more than the properties were assessed for or expected to go for, and some brought less, she said. There really wasn’t a rhyme or reason for sales on a lot of residential properties, she said.
Also, she cited a difficulty in finidng comparable sales.
The total values of taxable properties as of Aug. 23, 2012, were: residential, $390,889,300; multifamily, $35,626,300; commercial, $213,984,500; industrial, $26,576,400; for a grand total of $667,076,500, according to Easley.
City council sets the tax rate based on revenue needs, Easley said. If the tax rate were to stay at the current $1.01816 per $100 of assessed value, the reassessment would result in a loss of revenue of $284,909. If council was to decide to keep the level of revenue as it is now, the tax rate probably would need to be in the neighborhood of $1.06, Easley said.
Assessors are required by law to assess at 100 percent of fair market value, she said. Fair market value is defined as the amount a typical well-informed purchaser would be willing to pay for a property. The seller and buyer must be unrelated. The seller must be willing and under no pressure to sell, and the buyer must be willing and under no obligation to buy. The property must be on the market for a reasonable length of time. Payment must be cash or its equivalent. Financing must be typical for this type of property, Easley said.
Factors in determining fair market value include the highest and best use of property, replacement cost less depreciation, recent sales of similar properties and income generated by the property, Easley said.
There are 8,724 taxable accounts, some of which have multiple tax parcels, Easley said. The city has 410 exempt accounts, some of which have multiple tax parcels, she said.
Reassessment notices went out Jan. 4, she said. If property owners have questions or concerns “that we don’t have something right,” they can call a tax assessor at 403-5337 or 403-5128, or they can come by the revenue commissioner’s office at the municipal building on West Church Street and talk with an assessor and review information on their properties and similar ones, Easley said.
If the property owner is not happy with that, the next step is to file an application by April 1 requesting a hearing before the city’s Board of Equalization, which must finalize values by May 15, Easley said.
Property assessments are used to determine tax bills. Each budget year, Martinsville City Council sets city’s the tax rate, considering revenues and expenditures.
At the current tax rate is $1.01816 per $100 of assessed value, the real estate tax bill on a house assessed at $125,000 would be $1,272.70, Easley said.
Reassessment is done every two years in Martinsville, she added.